Quote:
Originally posted by taxwonk
You ignored the first part of my post. The money that taxpayers have already paid tax on is called "basis." They recover that tax-free. Capital gains are only the amount received above basis. As far as I'm concerned that is the same thing as "income." It should be taxed accordingly.
As for incentives for saving and investing, I think the opportunity to earn dividends, interest, capital gains, and not have to eat cat food when you retire is incentive enough. I don't think we need a big, intrusive government paying us to save and invest. That's not how I roll.
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I understood the first part of your post. You're missing, or avoiding, my point.
You cannot tell me that a person will be just as well off in retirement with a cap gains rate equal to the tax on wages, which is what you suggested, or at least implied. Higher taxes equal less money in people's pockets. I'm no tax lawyer, but its hard for me to see that any other way. What you're now arguing is more honest. You're admitting that, yes, raising the cap gains rate would decrease the quality of people's lives both pre and post retirement. And you're admitting you are seeking a wealth redistribution from those with accumulated capital to those without. That's govt interference.
I would support wholeheartedly a tax cut for workers to bring their taxes in line with the cap gains rate. If we must have parity, I'd say that's pretty fair. If Henry Kravis can have his advantageous rate on carried interest, why not the school janitor on his paycheck? Why don't we see the argument made from that perspective? Would you support that?
And please, don't try to repackage the lower cap gains rate as govt interference to try to make yourself out to be on the side of smaller govt. That's pretty transparent. The interference is the fact that we have a govt spending ungodly sums on that ludicrous war and so much pork throughout ourt country. Ultimately, people like you and I shouldn't disagree on these things. We should get together against the common enemy that steals from everyone - our bloated Fed Govt.
Start first with a downgrading of all federal benefits. Move next to eviscerating the defense contracting industry, which looks to me like one huge subsidy for a sector of the economy that ought to be dormant except when absolutely needed (See: Not Iraq).
